The ECB's AI adoption data shows uneven gains, yet the SNB's macroprudential cap binds, limiting policy headroom.

The Swiss National Bank separates monetary policy from financial stability: the policy rate is set solely for price stability, while vulnerabilities such as the mortgage market are addressed with macroprudential tools, chiefly the countercyclical capital buffer. That buffer is currently at its legal maximum of 2.5%, a Swiss peculiarity that limits the SNB's headroom. The document, a speech by Vice President Antoine Martin, argues that a resilient financial system is a precondition for effective monetary policy transmission, so the two objectives are complementary rather than conflicting.

The SNB's experience shows the cost of financial crises: five years after a crisis, GDP was around 4% lower than after a normal recession, with a maximum per-capita loss of 1.5%. This motivates the use of the buffer, which was reactivated in 2022 at its cap. However, the deactivation of the sectoral buffer during the pandemic reduced capital available for a potential real estate crisis, a trade-off the document acknowledges. The SNB does not currently recommend raising the buffer further, despite the lack of macroprudential headroom.

Concentration risk has risen: UBS's share of the domestic credit and deposit market reached about a quarter in 2024, up from 25% for credit and 25% for deposits in 2022. This concentration amplifies the importance of bank resilience for monetary policy. The SNB's policy rate was raised by 250bp within a year in 2022-2023, and the document suggests that a separate releasable capital buffer, based on international experience, could be beneficial. For investors, the binding cap on the buffer means that any future financial stability tightening would have to come from other tools or a legal change, while the policy rate remains free to target inflation alone.

AI use at work has doubled in two years, reaching 52% of euro area workers in 2026, up from 41% in 2025. The median user saves 3 hours per week, or 7.7% of working time, but the overall efficiency gain for the economy is only 3.8% because adoption is uneven — highly educated workers use AI at 61% versus 37% for lower educated. The ECB estimates AI could add 0.35% to annual productivity growth, a modest boost that may ease inflationary pressures over time. However, the drop in positive sentiment to 41% suggests growing skepticism, which could slow further adoption and limit the productivity gains that would support the ECB's policy normalization.

ECB Executive Board member Piero Cipollone outlined progress on Europe's tokenised financial market, noting that tokenised traditional assets on public blockchains grew 5 x between March 2025 and March 2026, and a US platform processed $354bn in daily tokenised repo transactions in March 2026. The EU's fragmented infrastructure — 31 CSDs, 14 CCPs, and 323 trading venues — with over 95% of transactions settled within the same CSD, underscores the need for interoperability. The Eurosystem's Pontes and Appia projects aim to integrate these markets with central bank money at the core, preventing fragmentation and external dependence. For bond markets, this signals a shift toward DLT-based settlement, potentially reducing costs and increasing efficiency, but also raising questions about the role of traditional intermediaries.

The steady core measure suggests the RBA's cautious stance is warranted, with the disinflation path uneven and services costs like meals out at 4.5% still elevated.